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Author: 7NoTrump One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121099  
Subject: Form 8606 Date: 2/3/1999 12:41 PM
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I made a nondeductible IRA contribution last year (in 1998 for 1997) for the first time and should have filed this Form 8606 with my 1997 return. This year (1998) I'm required to file the form again because I converted my regular IRAs to a Roth IRA.

To get right with the IRS on the 1997 Form 8606, should I forget about filing it and just fill out the 1998 form as if I have a 1997 one on file? Should I file the 1997 form with a 1040X for 1997, or just send it in by itself? Or can I just attach it to my 1998 return? (I'm guessing NOT on this last one)

I hope this is a no-brainer.

Thanks,

Lynn
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Author: AliFool Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9454 of 121099
Subject: Re: Form 8606 Date: 2/3/1999 6:43 PM
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Yikes! Looks like I did something similar, although my situation may be different because my "Roth Conversion IRA" (in 1998 for 1997) is my first-ever IRA -- I didn't have to roll over any pre-existing IRAs.

(See my post about "basis" in IRAs, #9450 -- I think I figured it wrong, and I should do it the way you are!)

Did you ever find out the answer to this one?

YUCK! What a MESS!

--AliFool

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Author: 7NoTrump One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9478 of 121099
Subject: Re: Form 8606 Date: 2/3/1999 9:53 PM
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AliFool, I haven't received a response yet, but your situation is exactly like my mom's (okay, I'll admit I do her taxes as well as my own, so the omission of both our 1997 Form 8606's was my fault). She rolled over her contribution from a regular IRA to a Roth IRA immediately as well, and neither you nor she should owe any taxes on the conversion (and I won't either on the 1997 contribution).

When I quit working in Sept. 97, I rolled my 401(k) account into a regular IRA, then converted it to a Roth IRA in January 98. Managing the money myself last year, this account grew 120%, and it was of great satisfaction to me knowing this growth was all tax free. It makes paying taxes on the basis a little less painful.

Lynn





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Author: AliFool Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9491 of 121099
Subject: Re: Form 8606 Date: 2/4/1999 12:24 PM
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Hi there. You said:

AliFool, I haven't received a response yet, but your situation is exactly like my mom's (okay, I'll admit I do her taxes as well as my own, so the omission of both our 1997 Form 8606's was my fault). She rolled over her contribution from a regular IRA to a Roth IRA immediately as well, and neither you nor she should owe any taxes on the conversion (and I won't either on the 1997 contribution).

I am wondering what you are going to do for your mom, then. Are you going to go back and fill out a 1997 form 8606, and then a 1040x form? I'm not sure what my responsibility is here.

When I quit working in Sept. 97, I rolled my 401(k) account into a regular IRA, then converted it to a Roth IRA in January 98. Managing the money myself last year, this account grew 120%, and it was of great satisfaction to me knowing this growth was all tax free. It makes paying taxes on the basis a little less painful.

Congrats on the Foolish choice to manage your money yourself. Sounds like you're doing well!

--AliFool


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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9552 of 121099
Subject: Re: Form 8606 Date: 2/5/1999 12:30 PM
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[[I made a nondeductible IRA contribution last year (in 1998 for 1997) for the
first time and should have filed this Form 8606 with my 1997 return.]]

That's correct...you should have filed Form 8606 in 1997 with your 1997 tax return.

[[ This year
(1998) I'm required to file the form again because I converted my regular IRAs
to a Roth IRA.]]

That's correct.

[[ To get right with the IRS on the 1997 Form 8606, should I forget about filing it
and just fill out the 1998 form as if I have a 1997 one on file?]]

Technically, you should file the 1997 Form 8606. But, for a practical matter, if you can PROVE your IRA contribution, and can PROVE that it was not deducted, you might want to simply blow it off. That's certainly not the IRS position, but some food for thought. You already know that it is only the one year in question, and you already know your basis in the IRA. So what's the big deal??? But the IRS will still require a Form 8606 for 1997.

[[ Should I file the
1997 form with a 1040X for 1997, or just send it in by itself?]]

You should be able to send it by itself. No need to file the Form 1040X, since the actual tax return did not change.

[[ Or can I just
attach it to my 1998 return? (I'm guessing NOT on this last one)]]

Not the right way to do it. But is it "bad"? Most likely not. It's a small issue. I would send the Form 8606 on it's own for 1997 and be done with it.

TMF Taxes
Roy

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9569 of 121099
Subject: Re: Form 8606 Date: 2/5/1999 1:40 PM
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[[AliFool, I haven't received a response yet, but your situation is exactly like my
mom's (okay, I'll admit I do her taxes as well as my own, so the omission of
both our 1997 Form 8606's was my fault). ]]

The answer is now up. Check out my previous post this morning on this issue.

Sorry that I'm a bit behind on my posting, but I've gotta make a living. The BIG BUCKS that the Fools pay me to hang around here don't quite cover my monthly bills. So I am forced to deal with preparing taxes, tax planning, estate plannin, and other tax issues for a living. Right now, I'm in California meeting clients in my other office. And on many days, time will not permit me to post on a daily basis.

Sorry....

But if you would like to attach a $100 bill to each post that you make, I'll make sure that I answer it within 12 hours from the time that it's posted. If not, you'll just have to put up with a bit of inconvenience.

Again...sorry...I hope that you can bear with me...

TMF Taxes
Roy


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